Drawing a trendline

A trendline is a straight line that makes the rhythm of a trend visible. In an uptrend it is drawn under the swing lows; in a downtrend, over the swing highs. Two points are the minimum needed to draw one; a third touch is taken as evidence that the market genuinely "sees" the line, and it earns the line credibility.

How do you apply it on a chart? First mark the obvious swing lows (or highs), then connect at least two of them and extend the line to the right. If you keep adjusting the line to make it fit, there probably is no clean trend to begin with — the line should fit the data, the data should never be forced onto the line.

A trendline does not work with ruler precision; think of it as a narrow zone rather than a thin line. Price poking a few points through it with a wick proves nothing by itself. The line shows you the rhythm; treat it as a millimetre-exact boundary and you will mistake the market's natural noise for a signal.